Coastal Commission scores victory in legal battle with San Diego Port over Harbor Island hotels

The California Coastal Commission has scored an appellate court victory in its long-running battle with the Port of San Diego over the state agency’s right to require low-cost lodging in connection with a proposal to develop new hotels on Harbor Island.

In a ruling issued Friday, a state appeals court reversed an earlier Superior Court decision that the Coastal Commission had wrongly rejected plans to develop up to 500 hotel rooms on East Harbor Island, including a 175-room hotel sought by Sunroad Enterprises.

In its 45-page decision, the 4th District Court of Appeal rejected the lower court’s reasoning that the Coastal Commission had overstepped its authority by requiring the provision of low-cost lodging as part of the project consideration.

“Rather, it is within Commission’s broad authority to apply its expertise and devise solutions to promote the policy of providing ‘lower cost visitor … facilities” by requiring some affordable overnight lodging, the three-judge panel wrote.

“The fact Commission previously certified (Port) District's master plan without provision of such lower cost accommodations or subject to in-lieu mitigation fees does not prevent Commission from now concluding that District's proposed amendment does not further the Act's mandate for lower cost overnight accommodations.”

The ruling culminates several years of failed efforts by the port and Sunroad to get its 175-room hotel approved. The issue of affordable lodging has been at the heart of the debate since the proposal first went before the Coastal Commission in 2014 as part of an amendment the San Diego Unified Port District was seeking to its master plan.

The requested amendment, which sought permission for Sunroad’s 175-room hotel, plus up to two additional hotels for a grand total of 500 rooms, was twice rejected by the commission, most recently in May of last year.

“This decision affirms the Coastal Commission’s broad authority to review port master plan amendments for their consistency with the Coastal Act,” Louise Warren, deputy chief counsel for the commission, said Monday. “The court specifically found that there was adequate support for the commission’s denial of this port master plan amendment based on its failure to ensure the provision of lower cost overnight accommodations on state tidelands administered by the port.”

The effect of the appellate court ruling is to nullify last year’s order by Superior Court Judge Ronald L. Styn that the Coastal Commission set aside its May 2017 denial of the Harbor Island hotel proposal. Styn had also ordered that a new public hearing be held on the port’s master plan amendment.

“We reverse the order and direct the trial court to discharge the writ of mandate and enter judgment in Commission's favor,” the appeals court wrote.

Port officials declined to comment on the ruling, saying they are still evaluating what steps they will next take. Port commissioners will discuss the case in a closed session on Wednesday.

Uri Feldman, president of Sunroad Holding Corporation, said the “port had the opportunity to resolve this a of couple years ago with regard to addressing low cost accommodations but instead the port chose to fight it thinking the Coastal Commission had overstepped its authority.”

The latest ruling leaves the fate of Sunroad’s quest to develop hotel rooms on East Harbor Island in limbo. On a separate track from its failed effort to build a 175-unit project on its marina leasehold, Sunroad more recently had been in negotiations with the port to develop an alternative proposal for a two-phased, dual branded, 500-room hotel project on East Harbor Island adjacent to its marina.

But even that project is in danger of collapsing after port commissioners last month opted to take no action on the hotel proposal. Guidance from the commissioners was needed in advance of a Sept. 27 expiration of Sunroad’s exclusive negotiating agreement with the port.

Feldman said Monday he is hoping the port commissioners will consider his request for an extension of the Sept. 27 deadline.

Still pending is a second court case stemming from a lawsuit the Port of San Diego and Sunroad filed challenging the Coastal Commission’s denial last year of the Harbor Island hotel master plan amendment. The port’s initial lawsuit was filed in 2015 following the commission’s first denial that same year.

A court hearing will be held later this month on that second court case, which the commission is hoping will now be moot given the appellate court ruling.

“The Commission believes that this decision resolves the issues at the heart of the Port District’s and Sunroad’s separate challenge to the Commission’s May 2017 action,” Warren said, “and that this lawsuit should be dismissed.”

lori.weisberg@sduniontribune.com

(619) 293-2251

Twitter: @loriweisberg

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